Imagine allowing everyone to register an account on your email server. Now you have people maybe sending stuff to other email addresses on other email servers that's maybe 'problematic'. In the case of email it's not a big deal, but with the fediverse it's different.
Instances usually have at least a set of basic rules (e.g. no to nazism), and will block instances that don't also follow them because they don't want to see swastikas on their home feed.
In practice this basically means that while the fediverse is decentralized and all that cool stuff, it's made up of two main groups of instances ('free speech' ones and not 'free-speech') that don't wanna have anything to do with each other.
Self hosting an instance for yourself without blocking anything may work, but the second you open it to the public, questionable people are gonna join and retweet questionable stuff from other instances. If you don't take action you're gonna get blocked, and if you take action you're gonna have to eventually de-federate with these problematic instances yourself.
In practice this basically means that while the fediverse is decentralized and all that cool stuff, it's made up of two main groups of instances ('free speech' ones and not 'free-speech') that don't wanna have anything to do with each other. Self hosting an instance for yourself without blocking anything may work, but the second you open it to the public, questionable people are gonna join and retweet questionable stuff from other instances. If you don't take action you're gonna get blocked, and if you take action you're gonna have to eventually de-federate with these problematic instances yourself.